VANCOUVER, BC, Aug. 31, 2020 /CNW/ - Datable Technology Corp. (TSXV: DAC) (OTCQB: TTMZF) (the "Company" or "Datable" or "DTC"), a software company that provides a marketing automation platform called PLATFORM3 to global consumer brands, is pleased to announce its financial results for the quarter ended June 30, 2020 ("Q2 2020").
For the six months ended June 30, 2020, the Company achieved the following milestones:
- Signed 20 new license agreements, compared to 15 agreements at the same period in 2019, to provide PLATFORM³ to leading Consumer Packaged Goods (CPG) brands. Datable ended June 2020 with approximately $3.4 million of baseline contracted revenues for PLATFORM³, with a gross margin of about 55%. Contracted revenues will be recognized as revenues in 2020 and subsequent periods.
- Revenue increased by 18% to $806,594 compared to the same period in 2019.
- Deferred revenues have increased by more that 100% to $1,062,760 compared to the same period in 2019. Deferred revenues account for services that have been paid for by customers that will be delivered in subsequent periods and recognized as revenues.
- Continued development of flexxi Rewards Network - a web portal that enables opt-in consumers to earn rewards completing activities such as purchasing CPG products, viewing valuable content posted by CPG brands, sharing content on Social media and referring friends. CPG brands will pay Datable for access to the consumers. The flexxi Rewards Network is built using Datable's PLATFORM³ technology.
The Company is also pleased to provide the following 2020 updates:
- As of year-to-date in 2020, contracted revenues have increased by almost 100% to approximately $3.7 million, compared to approximately $1.9 million at the same period in 2019. Contracted revenues will be recognized as revenues in 2020 and subsequent periods.
- Datable has signed 26 new license agreements this year, including the largest agreement in Datable's history under which a leading provider of household products (the "CPG Company") has contracted for approximately $1,000,000 in license fees and rewards in 2020 with a projected increase to over $4,000,000 in 2021 (See press release dated April 28, 2020).
- As of the six month period ended June 30, 2020, Datable has recognized $806,594 in revenues, from a total of approximately $3.7 million in contracted revenues, such that it has close to $2.9 million in contracted revenues that will be recognized in the second half of 2020 and subsequent periods. This does not include the projected increased budget of $4,000,000 in the agreement with the CPG Company, which if confirmed it will increase contracted revenues to approximately $7.7 million.
- Datable has provided guidance of achieving revenue growth of over 100% in 2020 based on the contracted revenues, deferred revenues and sales pipeline. The Company is confident that revenue growth will increase in the second half of 2020 but achieving 100% revenue growth will depend on the launch dates of significant programs, including the $1,000,000 agreement with the CPG Company. To support the growing business Datable expects expenses related to sales, customer service and the launch of the flexxi Rewards Network to increase expenses by approximately 20%.
- Datable has several annual agreements where PLATFORM³ hosts an ongoing digital loyalty and rewards program. Datable is generally paid an annual license fee plus transactions fees based on the number of times consumers validate purchases using PLATFORM³. The $3.7 million in contracted revenues noted above only accounts for license and service fees and does not include any transaction fees.
- To date, COVID 19 has not materially impacted the Company's long-term license agreements or its ability to deliver its services to customers. Nor has there been any significant negative impact on discussions regarding the expansion of existing license agreements and new agreements under discussion. However, Datable is monitoring the potential and immediate impact of COVID-19 and working with customers and service providers to mitigate issues that may emerge (See press release dated March 16, 2020).
- Most of Datable's large customers are leading consumer goods companies that provide staples including food, beverages, and household products which are expected to remain in demand during the COVID 19 crisis. In addition, many of Datable's license agreements and marketing programs extend into late 2020 for back-to-school and holiday shopping promotions, and into 2021 as long-term loyalty programs.
"In the second quarter in 2020, we continued to grow our core SaaS business signing multiple Fortune 500 companies as new customers during the Covid 19 pandemic. The Company also continued work to develop its own Consumer Loyalty and Rewards Portals - the flexxi Rewards Network. These Portals provide registered consumers with valuable rewards for engaging with brands and completing brand activities. The flexxi Rewards Network will enable Datable to begin collecting consumer data and expand its business model to include data and transactional revenue." said Robert Craig, DTC's CEO. "Building communities of consumers and owning the relationships and subsequent data will be a big driver of revenue in the coming years. Portals on the flexxi Rewards Network are built on top of Datable's proprietary PLATFORM³ technology which dramatically reduces costs and time to market for these properties."
Results of Operations:
Revenue for three months ended June 30, 2020 decreased by 9% to $340,951 and revenue for the six months ended June 30, 2020 increased by 18% to $806,594, compared with the same periods in 2019 respectively due to overall increase in average contract value, project deliveries and transactional revenues in the first six months in 2020 compared to that incurred in 2019. The Company's PLATFORM³ product is an integrated suite of digital marketing applications sold as SaaS for short-term promotions or on an annual subscription basis with recurring revenues. Revenue in the period reflected recognition of revenue from previous year contracts and new sales of the PLATFORM³ product offering.
Revenue growth for six months ended June 2020 was partly due to improvements in the functionality of PLATFORM³. In late 2019, DTC launched version 3.0 of PLATFORM³ which included new modules that extended and deepened its differentiation in the market by launching a break-through features on PLATFORM³ - Dynamic Messaging and Rewards (DMR). This feature is built on an Artificial Intelligence (AI) framework and empowers brands to deploy omnichannel communications, retargeting and contextual rewards to induce consumer purchases based on their previous and ongoing purchase behavior and brand engagement. DMR transforms PLATFORM3 into a self-regulating continuous feedback loop for ongoing sales (See press release dated Feb. 14, 2020).
Gross margin as a percentage of revenue for the three and six months ended June 30, 2020 was 68% and 67% respectively, compared to 72% and 72% for the three and six months ended June 30, 2019. Gross margin depends on the product mix for the reporting period. Revenues are comprised of a combination of higher margin sales of PLATFORM³, the Company's proprietary Software as a Service product combined with some lower margin third party services.
Datable launched an API connection to third party digital rewards platforms in prior years. This service enables DTC clients to offer digital rewards such as gift cards, movie tickets and virtual visas to incentivize purchase and purchase frequency. DTC purchases these rewards on behalf of the Company's clients and charges a transaction fee for the total amount of rewards purchased. Cost of sales also includes the cost of servers to host PLATFORM³, and project management and customer support staff.
General and administrative expenses for the three and six months ended June 30, 2020 were increased to $368,057 and $617,740 respectively, compared to $357,162 and $607,116 for the three and six months ended June 30, 2019. The slightly increase for the six months ended June 30, 2020 was mainly due to increase in corporate consultancy and corporate finance service contracts engaged in 2020 compare to the same period in prior year.
Sales and marketing expenses for the three and six months ended June 30, 2020 was $169,474 and $339,997 respectively compared to $116,987 and $262,548 for the three and six months ended June 30, 2019.
Research and development expenditures for the three and six months ended June 30, 2020 was $239,793 and $454,265 respectively compared to $148,576 and $320,429 for the three and six months ended June 30, 2019. The increase in research and development expenses for the six months ended June 30, 2020 was related to enhancement to PLATFORM³ and developing new platform flexxi. Research and development expenses may continue to increase in the future as the Company seeks to evolve and improve PLATFORM³ and flexxi, as well as to invest in creating new technology and products that will enhance the Company's value proposition to customers and provide additional revenues. Research and development expenses include wages and salaries and consulting fees.
Net and comprehensive loss for the three months and six months ended June 30, 2020 was $601,409 and $1,121,784 respectively, compared to $419,472 and $809,123 for the three and six months ended June 30, 2019. This increase in net loss for the six months ended June 30, 2020 was mainly due to the increase of share-based compensation, marketing and research and development expenses, net of the increase in gross profit and growth in revenue.
About Datable Technology Corp.
DTC has developed a proprietary, mobile-based consumer marketing platform – PLATFORM3 – that is sold to global Consumer Packaged Goods (CPG) companies and consumer brands. PLATFORM3 is delivered as a subscription service (Software as a Service model) and used by CPG companies to engage consumers, reward purchases and collect valuable consumer data. PLATFORM3 incorporates Artificial Intelligence and Machine Learning to monetize the consumer data, including demographics and purchasing behaviour, by sending consumers targeted offers by email and text messages. For more information, visit datablecorp.com.
For additional information about the company please visit www.sedar.com. The TSX Venture Exchange Inc. has in no way passed upon the merits of the transaction and has neither approved nor disapproved the contents of this press release. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. This news release contains forward-looking information, which involves known and unknown risks, uncertainties and other factors that may cause actual events to differ materially from current expectation. Important factors – including the availability of funds and the results of financing efforts, – that could cause actual results to differ materially from the Company's expectations are disclosed in the Company's documents filed from time to time on SEDAR (see www.sedar.com). Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company disclaims any intention or obligation, except to the extent required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
SOURCE Datable Technology Corp.
For further information: Datable Technology Corp., Robert Craig, Chief Executive Officer, (604) 639-5441, [email protected]